Property: Buyers who rush to ruins

As house prices spiral, supply dries up and demand increases, why not consider somewhere pleasing, picturesque ... and falling to pieces.

You may find the price appealing, but beware the words "scope for improvement". They should sound loud warning bells in the ears of buyers with limited funds.

A Grade II listed six-bedroom Georgian house for pounds 42,500? Sounds too good to be true. Well, it is true. But when the estate agent says it's in a time warp, he's not joking. Clifton House has barely been touched in 200 years, apart from having electric wiring installed around 1900.

Standing in large gardens near Lincoln, it has classical proportions, four reception rooms, the original roof tiles and cast-iron guttering - and dry rot, wet rot, mould and subsidence. The kitchen is currently partitioned to include a bathroom, from which a ladder leads to a first- floor room. There is no heating, and the windows are falling out because the putty is Georgian, too. The brick floors are worn into gullies, showing where generations have walked from room to room.

Clifton is also the subject of a local authority closing order, which means a buyer must comply with a schedule of works prepared by the council and in line with listed building regulations.

"It will need the whole front taking down and rebuilt," says Christopher Dew, who is buying it. "It has rotated, turning slightly forward, and will need underpinning. Rainwater has been running into the footings for a long time, so taking down the front elevation is the only cure. All the bricks will have to be kept and numbered. The internal plasterwork has been infected with mould and dry rot."

Dew is not a dreamer. He is a building surveyor, which gives him a head start over anyone else who might imagine they could nurse Clifton back to health. Work on the house is likely to cost pounds 100,000. At the end of the day, will it be worth more than pounds 142,500? "I certainly hope so," says Dew.

But half-finished projects dotted around the country bear witness to restorers defeated by houses that proved to be a dream too far.

Oxney Court, near St Margaret's Bay in Kent, is still a historic ruin despite the best efforts of its owners, who bought it three years ago. It was destroyed by fire during the First World War, and little more than a turret, a tower and a couple of walls are left of the grand country house which opened its grounds to the public in 1851. The owners spent two years applying for approval to restore it. Trees and shrubs were removed from the ruins. The garden was replanted, following the original plans. An apiary was restored, as was a two-bedroom cottage in the grounds.

"We fell in love with it," explains Australian-born Kim Pegler. "It is in a magical situation, in woodland, near the sea and commutable to London. We love it here, and it will be hideous to leave."

Planning consent has finally been granted for rebuilding the house, but Kim is now taking up an offer to work in Chile. "I just can't afford to do both," he says, "as reconstructing Oxney Court is likely to cost around pounds 500,000. But I wouldn't be frightened to take on a project like this again."

Cluttons are looking for a buyer with 250 guineas (pounds 262,500).

Less daunting is a Victorian Grade II listed house in the middle of Saffron Walden, recently offered for sale by the East Anglian agents Bruce Munro, who were almost knocked over in the rush to view. The redbrick cottage hasn't been touched for about 30 years. It has gaps in the roof tiles, is damp, needs rewiring and could do with a modern kitchen and bathroom. The old fireplaces have been boarded up and it stands on a busy road, with nowhere to park a car.

However, the pounds 75,000 asking price drew 17 couples in the space of two weeks before it was snapped up. "We're still getting calls about it now," says the agent.

And agent Christopher Blount says that Garden Cottage, a three-bedroom Cotswold stone property three miles from Malmesbury, sold after a week, at well above the asking price of pounds 120,000.

"It created more interest than anything else we've sold recently," he says. "It went to `best and final offers' with a dozen offers. The buyer plans to extend it and will need pounds 150,000. There is a strong demand for cottages to restore - it's everybody's dream."

Blount will be offering 17th-century Trinity Farm at auction on April 22. Originally two cottages in Redbourne, a pretty, unspoilt village, it has four bedrooms, two reception rooms, a Rayburn in the kitchen and six acres. It needs renovation.

"We had an offer in excess of the guide price on day one. We are asking for offers over pounds 200,000. But at the end of the day we're talking about pounds 300,000, and it will be a cash buyer."

Stone Farm, a Grade II listed 16th-century timber-framed country house in Warehorne, Kent, had been on the market through Strutt and Parker for a week when someone made an offer above the pounds 185,000 asking price. Interest in the property is so intense that the agents are organising block viewings. Yet it is virtually uninhabitable, with hot water or bathroom; the ceilings are falling down and the kitchen has a cast-iron solid fuel range and a hand water-pump. The house is primitive, to say the least.

"We did feel it would be like bees round a honeypot," admits S&P's James Thompson. "When you go in there and see all the old beams and inglenook fireplace, you can just imagine how it will look when it is refurbished. And he adds: "It is hard to explain. But it seems the worse condition the house is in, the more people want to buy it."